Ex-WTO head says Brexit will be costly for 'both sides'

Britain's departure from the European Union will be costly for both sides in trade terms, regardless of how good the exit deal reached, former head of the World Trade Organization Pascal Lamy said yesterday.

Britain's departure from the European Union will be costly for both sides in trade terms, regardless of how good the exit deal reached, former head of the World Trade Organization Pascal Lamy said yesterday.

The comments came a day after the National Treasury Management Agency (NTMA) here warned that Brexit will be negative for the Irish economy, with the effects likely to be felt from this year.

Britain's Prime Minister Theresa May has said Britain will be leaving the EU's single market and will instead seek a "comprehensive, bold and ambitious" free trade agreement with the bloc.

"Whatever deal we succeed in making, and I am pitching for the best deal, the most open, the most simple, the most efficient and the most pragmatic, the greatest deal we can have, is going to be complex and costly," said Mr Lamy, a former European trade commissioner who headed the WTO from 2005 to 2013.

"In trade terms, there is no way switching from the internal market to any other arrangement, including the best, won't be costly," he told an audience at the Institute for Government in London.

Ms May is due to trigger Article 50 of the European Union's Lisbon Treaty, beginning two years of divorce talks, by the end of this month.

Pascal Lamy said it would not be possible to reach a deal in this time, with just the trade agreement element likely to take five to six years, and that a transitional period would be needed.

Ms May has also said she is prepared to walk away from negotiations without a deal if she doesn't like what is on offer.

In the absence of an agreement, trade between Britain and the other 27 EU members would default to WTO rules and tariffs.

Mr Lamy rejected Ms May's suggestion that no deal could be better than a bad deal, saying trading on WTO terms "would be worse than a bilateral agreement".

But he added that he believed both sides would strive to avoid this situation.

"For such a thing to happen this would have been mishandled on either one side or both sides. I cannot see this as a sort of likely scenario." (Reuters)